It seems that Italian tax officials are not happy that Dolce & Gabbana set up Luxembourg as their on-the-paper company home. Seems that in Luxembourg, Dolce & Gabbana had to pay much lower taxes than they would have to in Italy. Dolce & Gabbana created the Luxembourg company in 2004 and technically it controls all Dolce & Gabbana brands.
This is probably the oldest trick in accountant’s book. And it also doesn’t seem to be illegal. As annoyed the Italian tax officials are, the investigation is officially over and all they can do is send out an ambiguous message to the public that charges could still be brought against Dolce & Gabbana.
Naturally, Dolce & Gabbana didn’t care to comment on the situation.